Cloudflare, Inc.
Cloudflare, Inc. Fundamental Analysis
Cloudflare, Inc. (NET) shows moderate financial fundamentals with a PE ratio of -613.31, profit margin of -4.72%, and ROE of -7.48%. The company generates $2.2B in annual revenue with strong year-over-year growth of 28.76%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 20.3/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze NET's fundamental strength across five key dimensions:
Efficiency Score
WeakNET struggles to generate sufficient returns from assets.
Valuation Score
ExcellentNET trades at attractive valuation levels.
Growth Score
ExcellentNET delivers strong and consistent growth momentum.
Financial Health Score
ModerateNET shows balanced financial health with some risks.
Profitability Score
WeakNET struggles to sustain strong margins.
Key Financial Metrics
Is NET Expensive or Cheap?
P/E Ratio
NET trades at -613.31 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, NET's PEG of -183.99 indicates potential undervaluation.
Price to Book
The market values Cloudflare, Inc. at 42.99 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 1324.19 times EBITDA. This signals the market has high growth expectations.
How Well Does NET Make Money?
Net Profit Margin
For every $100 in sales, Cloudflare, Inc. keeps $-4.72 as profit after all expenses.
Operating Margin
Core operations generate -9.38 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-7.48 in profit for every $100 of shareholder equity.
ROA
Cloudflare, Inc. generates $-1.69 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Cloudflare, Inc. generates strong operating cash flow of $668.39M, reflecting robust business health.
Free Cash Flow
Cloudflare, Inc. generates strong free cash flow of $332.59M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $0.95 in free cash annually.
FCF Yield
NET converts 0.53% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
-613.31
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-183.99
vs 25 benchmark
P/B Ratio
Price to book value ratio
42.99
vs 25 benchmark
P/S Ratio
Price to sales ratio
29.00
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.54
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.98
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.07
vs 25 benchmark
ROA
Return on assets percentage
-0.02
vs 25 benchmark
ROCE
Return on capital employed
-0.06
vs 25 benchmark
How NET Stacks Against Its Sector Peers
| Metric | NET Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | -613.31 | 35.19 | Better (Cheaper) |
| ROE | -7.48% | 1155.00% | Weak |
| Net Margin | -4.72% | -127067.00% (disorted) | Weak |
| Debt/Equity | 2.54 | 0.41 | Weak (High Leverage) |
| Current Ratio | 1.98 | 4.71 | Neutral |
| ROA | -1.69% | -314918.00% (disorted) | Weak |
NET outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Cloudflare, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
411.44%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
34.53%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
959.47%
Industry Style: Growth, Innovation, High Beta
High Growth